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Editor’s Note: Skift has started a new series of interviews with CEOs of destination marketing organizations where we discuss the future of their organizations and the evolving strategies for attracting visitors. Read all the interviews as they come out here.
NYC & Company is the organization charged with marketing one of the most iconic cities in the world. New York City sits at the top of many travelers’ bucket lists and its culture and attractions help define America across mainstream media.
New York City doesn’t need help getting people to visit. They city’s mayor Bill de Blasio recently announced a record 56.4 million visitors arrived in New York City in 2014, two million more visitors than 2013. The city is always looking to extend visitors’ stays, encourage repeat visitation, and expand its visitor base in quickly growing source markets such as Brazil and China.
To that end, NYC & Company rolled out a number of new marketing initiatives including a campaign aimed at locals, the continuation of its neighborhoods and family-oriented campaigns, and the naming of Taylor Swift as the city’s official global ambassador.
Skift recently sat down with Fred Dixon, who was appointed President and CEO of NYC & Company in March 2013, to discuss the role that data plays in forming marketing strategies, how to prepare for international visitor growth, cooperation for the sake of critical infrastructure changes, and why the Taylor Swift partnership isn’t just a one-hit wonder.
An edited version of our conversation can be read below.
Skift: Britain is New York City’s most important overseas market. Is there any growth and how do you market the destination in a market where there’s already high awareness of the New York experience?
Fred Dixon: It goes up and down between two and three percent each year. We watch currency shifts closely because if the pound surges at all then we have an opportunity in the marketplace. We’ll ramp up promotions during those periods because the Brits come across in greater frequency. Even with secondary markets, you have people who come when the currency is in their favor.
We use data for all of our decision making processes and have in-depth profiles into each of these markets. There are public-facing profiles and more detailed data that we dig into. This, for example, gives us a sense of how a market is performing in New York.
Skift: How do you collect this data?
Dixon: Through a variety of sources. We have three researchers on staff, one of which is an economist and another which is an anthropologist. We get data from the federal government and supplement that with our own research that we do with Oxford Economics, Longwoods International, and PKF Consulting. We monitor economic growth, growth of the middle class, currency fluctuations, and political instability. [We have] an algorithm that takes in a variety of data points to forecast market trends. It’s good data for our members, press, and trade partners to have.
One of the big things that we were able to talk about this year was Brazil. Length of stay is up to 8.1 days from 7.5 days and that’s important for us. International markets are a priority because they stay longer and spend more.
We use this with the trade, too, because it influences how they promote the product in each country. Most of our advertising we do overseas is in partnership with the trade. We’ll almost always have a call to action. Often times they’ll lead in price in order to stimulate interest and draw the person in. We use that research to guide marketing decisions.
Skift: What do you do here in New York to make sure that it’s easy for travelers from emerging markets like China and Brazil to get here and that the have a positive experience once they arrive?
Dixon: One of the most important factors for us, and a huge asset for New York, is the airlift. We have tremendous airlift from all markets and it’s a vital piece of our success. Secondly, the fact that New York is such a melting pot of cultures, languages, and cuisine makes travelers feel at home here. Often times Brazilians will encounter Portuguese speakers and that’s the local homework you do to get ready for the marketplace.
Since we opened an office in Brazil in 2007, we’ve done almost annual market updates giving our local members and partners this level of data and bringing in experts and speakers from the marketplace.
We’re very lucky here because we have an incredible group of local suppliers that are smart and aggressive. It doesn’t take much for them to see the trend and know they need Portuguese-speaking staff. They see the results. You’ll find all the retailers hiring Mandarin-speaking staff or resources in the country from a Weibo account to local marketing accounts.
Skift: You’ve worked in organizations across the travel industry and last worked at a destination marketing organization in Nashville, Tennessee. How is New York different?
Dixon: It’s really just a matter of scale. They’re good at what they do in Nashville. I learned to think out of the box. Oftentimes when you’re at a secondary destination, you have to try harder so you learn to think creatively, aggressively. Those skills really helped me when I came to New York. I was raised in Tennessee and grew up in the hospitality industry. I worked for Delta Air Lines in college then for a major attraction, The Biltmore Estate in North Carolina. Then I worked for the Nashville Convention & Visitors Corporation for seven years.
I’ve been fortunate to dabble in different parts of the industry — it helps you become more well-rounded in your thinking. My dream was to come to New York and Terry Dale, now CEO of the USTOA, suggested to come up and learn the city. I took a job with Planet Hollywood for two years then I worked on Broadway for a year. Sometimes you have to zig before you can zag.
Skift: How has NYC & Company and destination marketing, in general, changed since in that time? There are so many more tools that exist today, from social media to discovery apps.
Dixon: The world has changed in so many ways and the digital space changed everything from the way that consumers behave to the way that sellers and destinations behave. The world has also become smaller. I came on board in 2005. Based on research, we saw huge opportunities in international markets. That was the quickest path to having sustained profound economic impact in New York. We began to invest in markets outside of our core because for a long time, we really focused on western Europe. We were too reliant on the region so we began investing in South America then China. We saw there were going to be big opportunities so we set up our first outpost there.
Skift: How do you communicate with visitors once they’re in market?
Dixon: It all goes back to the digital space and growth of information available to them online. Word of mouth is still very strong, but it no longer comes from a dinner party with neighbors — it’s online from people you don’t know. It’s opened up the world in so many ways. The travel system has also matched that growth so you have more flights to more places and more promotions. People think more globally, too.
One of the things that’s fascinating about the Brazilian market is their affinity for travel. They travel because goods are cheaper outside of their country but also for bragging rights. The U.S. is a very aspirational destination for them.
Skift: How do you compete with other U.S. destinations like Miami or Los Angeles that are also popular destinations for international visitors?
Dixon: Everything we do is based on research. We look for market opportunities, see what the market influencers are, and what moves the market. We know that shopping is the most important thing that Brazilians do in New York, it’s somewhere around 93 percent. We garner enormous amounts of foreign media and New York is the pop culture center of the world.
People have New York in their face almost every day around the world. The destination has almost 100 percent brand awareness, which is a unique position to be in. In some countries, they have know the New York of the 1980s or ’90s. People always make pop culture references in New York. Jimmy Fallon is now creating a whole new affinity.
When I got here, I saw that a lot of the imagery of New York around the world was dated. Media outlets in Germany or India were pulling photography that could be ten years old. Starting in 2008, we began to serve out fresh imagery each month.
Skift: As CEO of NYC & Company, what do you do to make sure that visa processes are smooth for international visitors? Do tourism boards have a responsibility to work on these kinds of issues?
Dixon: It’s important and something that we work on all the time. You generate all this interest and demand and you have to be able to deliver on it. We work really hard on messaging to show that tourism development is economic development.
It means jobs and tax revenues. In order to maximize that, you have to make sure that all the faucets are on in the right combination. When you have markets like Brazil, where the funnel was being restricted in terms of access to the U.S., then you have to team up with others to open that funnel, to bring federal attention to it. That’s where partnerships across the travel industry come in very handy.
I was appointed last year to the Travel and Tourism Advisory Board [a group advising the Secretary of the U.S. Department of Commerce] where we’re actually able to advise on some of these issues. It’s important for a destination like New York to have a voice at that table. We also take advantage of opportunities to work with local and federal officials, to create a 360-degree effect with elected officials. The president has gotten that as well as anyone with the priority he’s put on visa waiver expansion and visa processing improvements.
Skift: What’s your take on Brand USA? Do you think that they’re doing a good job at marketing the country?
Dixon: My predecessor George Fertitta was involved in their messaging and strategy from the beginning. We totally support their efforts and everything that they’re doing.
It boggles the mind that a country like the United States, where tourism is such big business, didn’t have a tourism board for so long. We felt it as much as anyone. To not have a national tourism board behind you creating inspiration at the highest level was a negative, a weakness. It’s amazing that we went for so long with states and cities having to fend for themselves.
Skift: What impact has Brand USA had so far? Do you think it raised awareness of the destination?
Dixon: One of the biggest opportunities is going to be in repeat visitation. A destination like New York is a gateway so there’s an opportunity for travelers to come back to explore the United States. We think Brand USA is going to be particularly effective in promoting the secondary destinations and new locations that travelers didn’t know about before. If we can secure more of that business for the U.S. then we have a bigger opportunity to attract repeat visitation.
Skift: Americans’ tendency to forgo vacation made many headlines last year. An Expedia survey reported that Americans left 4 vacation days on the table and our survey found that 42 percent of Americans didn’t take a single vacation during 2014. What role should NYC & Company or tourism boards in general play in changing this? How does it impact New York as a destination?
Dixon: All of us in the travel industry think domestic travel is a huge opportunity. For us, the international market represents 20 percent of volume and 50 percent of spend. It represents half the economic impact and the fastest growth but we can’t overlook the domestic market.
We’re very fortunate to have strong demand and activity most of the year. We have domestic promotions in January and February and July and August. We knew the family market was a real opportunity for New York and we’re in our fifth iteration of our family ambassador program.
Then we have programs like Restaurant Week and Broadway Week that really position the destination as value-oriented and affordable during January and February.
Skift: NYC & Company announced that Taylor Swift was the new global ambassador in late 2014. How did you choose Swift and what has the impact of the campaign been so far?
Dixon: I like to do the unexpected. People asked me why we didn’t pick a famous New Yorker like Robert DeNiro, but we did that with 30 local celebrities in 2007 and 2008 and it didn’t generate anywhere near the press that Taylor has generated. You have to think about marketing campaigns in their entirety — not just the messaging but the kinds of conversations that you’re going to create. That was the goal with Taylor.
We often do the expected in the travel industry. I like to do the unexpected. As she settles into New York, she’ll be sharing her experience with her followers and will be speaking about it on her travel circuit. She talks about New York and her new role in all of her interviews. I don’t think we could ever replicate the program.
Skift: NYC & Company also recently released a campaign encouraging locals to explore their own city. What was the thinking behind that and what opportunities do you see in local travel?
Dixon: Traditionally in tourism we define a visitor as someone who travels more than 50 miles to get somewhere. The traditional model of tourism is an export economy. This campaign challenges that by tapping into the wallets of your local community. As New Yorkers, we all feel like there are parts of our city that we don’t know. The notion is to tap into that, to take advantage of our natural assets of the more than eight million people that live here.
The idea was to make the familiar seem exotic with vintage travel posters. We picked one neighborhood in each of the five boroughs and partnered with American Express, which was interested in driving traffic to their merchants in neighborhoods outside of midtown.
Skift: Funding is a constant concern for destination marketing organizations. Is it an issue for NYC & Company and why does it remain such a challenge for the industry as a whole?
Dixon: The destination marketing space has to continue to advocate for itself. That’s why organizations like U.S. Travel are so important in carrying our message and promoting the business of destination marketing. We always make sure that there is a connection between tourism promotion and local impact. As marketers, I don’t think that we’ve promoted ourselves enough. The public funding sector is competitive, which is why the public-private model is proving to be effective.
In California, destination marketing organizations are weaning themselves off of public dollars — in terms of city hall contributions — and taking more from local business improvement districts. I think everyone has to find what model works for them. I think it will always be a bit of a struggle, that we have to be responsible, improve our worth, and be relevant. Relevance is everything.
Skift: Are you concerned about the rise of Airbnb and the customers, and tax revenues, that it’s taking from hotels?
Dixon: The biggest issue is that it’s an unregulated and untaxed business in New York City. Also, we’re concerned about the safety of travelers. We have a commitment to promote the hotel industry not only because it’s legal, but because they are members of our organization. The majority of business that Airbnb does in New York is allegedly illegal so we do not endorse it. It might be different if we were in a destination without a lot of hotel inventory but we’re not in that situation.